Correlation Between Invesco Solar and FIRST TRUST
Can any of the company-specific risk be diversified away by investing in both Invesco Solar and FIRST TRUST at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Invesco Solar and FIRST TRUST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Solar Energy and FIRST TRUST GLOBAL, you can compare the effects of market volatilities on Invesco Solar and FIRST TRUST and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Invesco Solar with a short position of FIRST TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Solar and FIRST TRUST.
Diversification Opportunities for Invesco Solar and FIRST TRUST
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and FIRST is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Solar Energy and FIRST TRUST GLOBAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST TRUST GLOBAL and Invesco Solar is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Invesco Solar Energy are associated (or correlated) with FIRST TRUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST TRUST GLOBAL has no effect on the direction of Invesco Solar i.e., Invesco Solar and FIRST TRUST go up and down completely randomly.
Pair Corralation between Invesco Solar and FIRST TRUST
Assuming the 90 days trading horizon Invesco Solar Energy is expected to under-perform the FIRST TRUST. In addition to that, Invesco Solar is 3.86 times more volatile than FIRST TRUST GLOBAL. It trades about -0.04 of its total potential returns per unit of risk. FIRST TRUST GLOBAL is currently generating about 0.09 per unit of volatility. If you would invest 289,375 in FIRST TRUST GLOBAL on November 7, 2024 and sell it today you would earn a total of 32,550 from holding FIRST TRUST GLOBAL or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Solar Energy vs. FIRST TRUST GLOBAL
Performance |
| Timeline |
| Invesco Solar Energy |
| FIRST TRUST GLOBAL |
Invesco Solar and FIRST TRUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Solar and FIRST TRUST
The main advantage of trading using opposite Invesco Solar and FIRST TRUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Solar position performs unexpectedly, FIRST TRUST can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in FIRST TRUST will offset losses from the drop in FIRST TRUST's long position.| Invesco Solar vs. Invesco MSCI Emerging | Invesco Solar vs. Invesco EURO STOXX | Invesco Solar vs. Invesco Markets Plc | Invesco Solar vs. Invesco FTSE RAFI |
| FIRST TRUST vs. FIRST TRUST GLOBAL | FIRST TRUST vs. FIRST TRUST GLOBAL | FIRST TRUST vs. FIRST TRUST GLOBAL | FIRST TRUST vs. FIRST TRUST INDXX |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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